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Goodwill and Intangible Assets | 9 Months Ended
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Jul. 02, 2016
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Through the second quarter of 2016, we had two operating and reportable segments: (1) Software Products and (2) Services. Effective with the beginning of the third quarter of 2016, we changed our operating and reportable segments from two to three: (1) Solutions Group, (2) Technology Platform Group and (3) Professional Services. We assess goodwill for impairment at the reporting unit level. Our reporting units are determined based on the components of our operating segments that constitute a business for which discrete financial information is available and for which operating results are regularly reviewed by segment management. Our reporting units are the same as our operating segments. As of July 2, 2016, goodwill and acquired intangible assets in the aggregate attributable to our solutions group, technology platform group and professional services segment were $1,206.4 million, $255.8 million and $30.9 million, respectively. As of September 30, 2015, goodwill and acquired intangible assets in the aggregate attributable to our software products segment and services segment were $1,297.9 million, and $62.4 million, respectively. Acquired intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. We evaluate goodwill for impairment in the third quarter of our fiscal year, or on an interim basis if an event occurs or circumstances change that would, more likely than not, reduce the fair value of a reporting segment below its carrying value. Factors we consider important, on an overall company basis and segment basis, when applicable, that could trigger an impairment review include significant under-performance relative to historical or projected future operating results, significant changes in our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, a significant decline in our stock price for a sustained period and a reduction of our market capitalization relative to net book value. We completed our annual goodwill impairment review as of July 2, 2016 and concluded that no impairment charge was required as of that date. To conduct these tests of goodwill, the fair value of the reporting unit is compared to its carrying value. If the reporting unit’s carrying value exceeds its fair value, we record an impairment loss equal to the difference between the carrying value of goodwill and its implied fair value. We estimate the fair values of our reporting units using discounted cash flow valuation models. Those models require estimates of future revenues, profits, capital expenditures, working capital, terminal values based on revenue multiples, and discount rates for each reporting unit. We estimate these amounts by evaluating historical trends, current budgets, operating plans and industry data. The estimated fair value of each reporting unit was at least approximately twice its carrying value as of July 2, 2016. Goodwill and acquired intangible assets consisted of the following:
| July 2, 2016 |  | September 30, 2015
| Gross Carrying Amount |  | Accumulated Amortization |  | Net Book Value |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Book Value
| (in thousands)
Goodwill (not amortized) |  |  |  |  | $ | 1,169,660 |  |  |  |  |  |  | $ | 1,069,041 |
Intangible assets with finite lives (amortized) (1): |  |  |  |  |  |  |  |  |  |  |
Purchased software | $ | 352,782 |  |  | $ | 192,509 |  |  | $ | 160,273 |  |  | $ | 284,257 |  |  | $ | 174,887 |  |  | $ | 109,370 |
Capitalized software | 22,877 |  |  | 22,877 |  |  | — |  |  | 22,877 |  |  | 22,877 |  |  | — |
Customer lists and relationships | 355,504 |  |  | 198,335 |  |  | 157,169 |  |  | 349,938 |  |  | 174,017 |  |  | 175,921 |
Trademarks and trade names | 19,012 |  |  | 13,151 |  |  | 5,861 |  |  | 18,534 |  |  | 12,759 |  |  | 5,775 |
Other | 3,941 |  |  | 3,862 |  |  | 79 |  |  | 3,946 |  |  | 3,711 |  |  | 235 |
| $ | 754,116 |  |  | $ | 430,734 |  |  | $ | 323,382 |  |  | $ | 679,552 |  |  | $ | 388,251 |  |  | $ | 291,301 |
Total goodwill and acquired intangible assets |  |  |  |  | $ | 1,493,042 |  |  |  |  |  |  | $ | 1,360,342 |
(1) The weighted average useful lives of purchased software, customer lists and relationships, trademarks and trade names and other intangible assets with a remaining net book value are 7 years, 10 years, 9 years, and 3 years, respectively. Goodwill Changes in goodwill presented by reportable segments were as follows:
| Software Products Segment |  | Services Segment |  |  |  | Total
| (in thousands)
Balance, October 1, 2015 | $ | 1,016,413 |  |  | $ | 52,628 |  |  |  |  | $ | 1,069,041 |
Acquisition of Vuforia | 23,316 |  |  | — |  |  |  |  | 23,316 |
Acquisition of Kepware | 77,081 |  |  | — |  |  |  |  | 77,081 |
Foreign currency translation adjustments | 228 |  |  | (6 | ) |  |  |  | 222 |
Balance, July 2, 2016 prior to reallocation | $ | 1,117,038 |  |  | $ | 52,622 |  |  |  |  | $ | 1,169,660 |
| Solutions Group |  | Technology Platform Group |  | Professional Services |  | Total
| (in thousands)
Balance, July 2, 2016 after reallocation | $ | 1,050,013 |  |  | $ | 90,053 |  |  | $ | 29,594 |  |  | $ | 1,169,660 |
Amortization of Intangible Assets The aggregate amortization expense for intangible assets with finite lives was classified in our Consolidated Statements of Operations as follows:
| Three months ended |  | Nine months ended
| July 2, 2016 |  | July 4, 2015 |  | July 2, 2016 |  | July 4, 2015
| (in thousands)
Amortization of acquired intangible assets | $ | 8,294 |  |  | $ | 9,105 |  |  | $ | 25,040 |  |  | $ | 27,691 |
Cost of software revenue | 6,383 |  |  | 4,957 |  |  | 18,235 |  |  | 14,438 |
Total amortization expense | $ | 14,677 |  |  | $ | 14,062 |  |  | $ | 43,275 |  |  | $ | 42,129 |

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- Definition The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16373-109275 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16265-109275 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=26713463&loc=d3e16323-109275 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13816-109267 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35741047&loc=d3e13854-109267 + Details
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